MANILA, Philippines - The Philippines has the potential to become a major hub for logistics services providers as the size of the market is expected to hit over P71 billion in 2020, a regional research firm said.

In its report titled “Philippines Transport & Logistics 2015,” Transport Intelligence (TI) said the country could improve on its performance as it currently lags behind other countries in Southeast Asia in terms of logistics.

Michael King, head of operations in Asia of TI, said the Philippines needs to encourage inward investment by manufacturers as well as investments in infrastructure.

“TI believes that if the Philippines can overcome many of the infrastructure difficulties it currently endures at its ports and airports and, especially, on Luzon’s blocked highways, then it has every chance of becoming a major growth region for manufacturers to migrate towards,” King said.

He cited strong economic growth in the Philippines has been fuelled by strong remittances from Filipinos living and working abroad.

“It boasts a fast growing economy and a thriving consumer market driven by its growing middle class, remittances and the offshoring of back-office functions by many knowledge and financial institutions,” he added.

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Aside from investing heavily in outdated infrastructure, he pointed out that the government should take steps to improve trade flows.

“As such, by removing existing logistics performance issues and the many obstacles to doing business in the country, TI believes it is well placed to become a growing market across the various logistics sectors,” King said.

The gradual integration of the Asean Economic Community next year offers a huge opportunity for the Philippines and other member states to boost regional trade.

Likewise, the company added that the Logistics Performance Indicator (LPI) of the Philippines should reach a certain threshold as it based its market sizing analysis using the low, medium, and high growth scenarios from 2013 to 2020.

The research provider believes the size of the country’s contract logistics market would hit P71.41 billion (1.412 billion euros) in 2020 from P24.17 billion (478 million euros) in 2013.

“At the upper range of LPI improvement, we believe the size of the Philippines’ contract logistics market increase from €478 million in 2013 to €1.412 billion by 2020,” TI said.

This translates to a compound annual growth rate (CAGR) of 16.7 percent in 2013-2020.

However, it explained the Philippines could see a slower CAGR at 10.5 percent to P48.65 billion (962 million euros) by 2020 if it fail to pursue business-friendly reforms.

“A lot will depend on the determination of whichever candidate wins the looming presidential elections to drive through policy reform,” TI said.

It also cited bureaucracy, corruption, the lack of transparent rules and codes of business and a sometimes “murky” legal system all create barriers to business success in the Philippines.

It said streamlining many of the processes and removing obstacles that make business in the Philippines so difficult could be a major driver of economic growth, trade and logistics demand.

Likewise, it said many of the same drivers of contract logistics market expansion would determine growth rates for forwarding. It believes the total freight forwarding market could grow by a CAGR of 15.1 percent during the period under a high LPI increase scenario and only by nine percent under a low forecast.

“TI believes that if the next Philippine government embraces policy change to address its current LPI performance, then it will become a major regional growth engine for both contract logistics and forwarding,” King added.

A view of Greenbelt in Makati Business District. Photo by Jonathan Cellona for ABS-CBNnews.com
MANILA, Philippines - Do you ever wonder what sorts of businesses are found here in the country and which company makes the most out of their enterprise?

It wouldn’t be that surprising if you say yes.

The Philippines has a lot of companies that cater to every single need of the Filipinos. There are companies for media services, for travel and tours, financial, construction, health care, consumer goods, retail, technology and telecommunications.

Businesses are established most basically because people need the services. People have differing needs, and differing needs would mean a lot of opportunity to earn money. It’s that simple rule of supply and demand that governs how and why businesses are made in the first place. Understand the need and you know what strings to pull.

For one thing, food is a thriving business in the Philippines, as it’s an essential need, thus it will forever be a part of the top grossing business in the country. Plus take in the fact that almost every Filipino is a foodie at heart. We also love trying new things, like eating Korean, Japanese, Chinese, Middle Eastern, Thai and other cuisines. Starting a restaurant of any size, given that your immediate target population (which are the people proximate to your proposed business site) will like the idea, and you have the skills to put up with the demand, then why not jump in to it?

Take note that Filipinos are very sensitive and conscious to what they eat and we have been growing our consciousness over what to eat and what not too eat.

The health food market (such as organic farming) has been gaining popularity over time. Even so, food items such as fast food, barbecues, cupcakes, fried siopao, waffles, street foods, shakes and frappes are still a huge success in the market.

This is also why health and beauty-related businesses are also making an impression in the market. There are several beauty clinics, dermatological clinics, spa, and drug firms that are doing quite well in the business. If you have any knowledge about this, then might as well venture in this line, as it may bring you reasonable profits.

Also, Filipinos are very sentimental people. We like keeping memories and highlighting momentous events in our lives. This is where T-shirt, and tarp printing, photography and digital services, and event planning come in. Debuts, weddings, reunions, birthdays, and so on are some of the chapters of a Filipino’s life that they want to be celebrated in a very memorable way. Knowing this, if you have the equipment, and then it’s quite considerable to invest in this line as well.

You can also venture to sell pre-loved items, as we are born thrifty and practical, we tend to buy and sell things to have a taste of everything. It’s pretty certain that there are thousand out there looking for pre-loved items that they could afford to buy. Several platforms such as ayosdito.ph and olx.ph can be used for this buy and sell business.

One thing more, Filipinos are bound to go the distance, well figuratively and literally. We love traveling and seeing places. Its like we were born with adventure hungry blood. Thus travel and tour businesses also flourish these days. No matter if its local or international, there's a promising future for travel and tour businesses. Also, because our country boasts beautiful beaches, mountains, waterfalls and historical places, tourism-related business such as souvenirs and tour guide businesses can be of great profit if you plan to invest in it as well.

These are just some of the things that you ought to know about the Filipino market.

A key to succeeding in the market is to know what to do and how to it. If you know your market, you can throw in the right strategy to improve your sales, and elevate your enterprise. Understanding the supply and demand, and you gain profit in your hands!

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05-24-2015, 06:37 PM

Moody’s says PH economy grew 7.3% in 1st quarter

Amy R. Remo

@inquirerdotnet

Philippine Daily Inquirer

4:11 AM | Saturday, May 23rd, 2015

The Philippine economy grew by 7.3 percent in the first quarter of the year, according to Moody’s Analytics.

Jumping the gun on the Philippine Statistics Authority (PSA), Moody’s Analytics confirmed the continued growth of the economy under the Aquino administration in a report posted on ABS-CBN’s online portal on Friday.

Moody’s Analytics, a think tank, is an affiliate of Moody’s Investors Service, one of the world’s three major credit rating agencies.

At press time, there was no immediate comment from Malacañang or the finance department, as the official report on the country’s first quarter gross domestic product (GDP) has yet to be released.

National Economic and Development Authority Director General Arsenio M. Balisacan and PSA National Statistician Lisa Grace S. Bersales will release the 2015 First Quarter Performance of the Philippine Economy on May 28.

Moody’s Analytics credited the strong performance of the economy in the first quarter of the year on government’s higher infrastructure investment and spending.

“Moody’s said strong electronics exports also gave the economy a lift due to improved global demand especially from the US. Likewise, the country is expected to benefit most from low oil prices with businesses and even consumers able to spend more due to savings from fuel costs,” said Moody’s Analytics, in a report posted on ABS-CBN’s online site.

Apec’s 3rd fastest growth in 2014

The report said a 7.3 percent growth would help the economy be on track to meet the Aquino administration’s full year target of 7 to 8 percent.

In 2014, the economy posted a full-year growth of 6.1 percent.

Also in 2014, the Philippines posted the third fastest GDP growth among the Asia-Pacific Economic Cooperation (Apec) economies, next to Papua New Guinea and China.

In Apec’s latest economic trends analysis titled, “Economic Resilience Amidst Global Headwinds,” the Philippines is seen growing by 6.7 percent this year, and 6.3 percent in 2016, enabling the country to remain as the third fastest growing economy among Apec members.

On the whole, the Apec members is seen to grow at a faster pace of 3.2 percent within the next two years on the back of a strong domestic demand and lower oil prices.

Silent

Citing data from the International Monetary Fund (IMF), the Apec said in its latest economic trends analysis that the economic growth in the near term would also hinge on the impact of the United States’ economic resurgence and normalization of the monetary policy.

Last year, Apec economies proved resilient amid challenging external conditions as the bloc posted an average growth of 2.9 percent, which was similar to the level in 2013, but lower compared to the 3.4 percent world GDP growth estimate by the IMF.

This was amid uncertainties surrounding the path of oil prices and the timing of monetary normalization in the US.

Upside opportunities

This year, upside opportunities for growth would come mainly from domestic factors, particularly robust household spending that is ably supported by steady government consumption and investment, according to economic trends analysis.

“Uncertainties surrounding the trajectory of oil prices and the timing of US monetary policy normalization combined with slower economic activity in China will impact on the near-term GDP growth of Apec economies. The steady and significant decline in oil prices is expected to directly affect oil exporters, weighing down output levels,” it said.

As economies rebalance towards domestic drivers of growth, Apec members will now need to strengthen private consumption through more inclusive and sustainable growth.

“This will require both increasing labor productivity and innovation to raise wages and living standards, as well as reducing income uncertainties through safety nets and social insurance to allow households to smooth consumption.

Fiscal consolidation programs

Economies could consider implementing fiscal consolidation programs, where appropriate, that will take into account spending rationalization, revenue generation and subsidy reforms, which will make public funds available for programs aimed at improving economic inclusiveness, sustainability and innovation,” the report stated.

Such programs, in turn, will need to cover skills development, investments in infrastructure (including regulatory and financial reforms), making labor markets more open for women and disadvantaged groups, and enhancing institutions and governance at all levels to strengthen transmission mechanisms between policy and inclusive growth.